Housing prices rocket 10% in the third quarter

Housing prices continue accelerating, a trend that was intensified in the third quarter of the year. According to Statistics Portugal (INE), between the beginning of July and the end of September, house prices surged past 10%.

According to the House Price Index (HPI),  on average, housing prices increased 10.4% in the third quarter of 2017 in comparison to the same period of last year. This would be the largest prices’ growth rate in the history of the Portuguese statistical office, which goes back to the beginning of 2009.

This emphasis on prices’ growth can be largely explained by the increase in the prices of used real-estate: “The price behavior of existing dwellings, which increased 11.5% in relation to the same quarter of 2016”, according to INE. As for new dwellings, there was a 6.9% growth in prices in the third quarter of the year, in comparison to the homologous period.

Number of sales also grows

The increase in prices was followed by an increase in the amount of properties sold, which also ascended to a new historical peak since 2009. In the third quarter of the year, in Portugal, a total of 38,783 dwellings were sold, which corresponds to the highest number in the nine-year history.

This evolution has been fed mostly by a growth in the sale of used dwellings, which ascended to a total of 32,864 sales. This number equals 84.7% of the total amount of transactions and it corresponds to the highest proportion of the history. As for new dwellings, transactions totaled 5.919 in the third quarter of the year.

As for the geographical distribution of the sales, Lisbon continues to lead the ranking. Between the beginning of July and the end of September of 2017, 13,140 real-estate properties were sold in the Lisbon Metropolitan Area. This means it was one third of the total amount of transactions.

The increase in the number of houses sold and the rise in their average price is happening in a time of economic improvement for Portugal. This has led more people to decide to move forward and purchase a house, which also results from bank’s availability to finance these types of acquisitions, namely by decreasing the spreads demanded and increasing credit granting.